Portfolio Update – January 2012

Anyone else a bit frustrated that the market has gone up since January? Anyone at all? 🙂 To be fair, it definitely boosts my net worth value, but I’m looking to do a bit of purchasing so I’m waiting for it to drop a bit. Yes, I know, you’re not supposed to time the market. Yes, I know, studies have shown that, over the long term, fees and asset allocation play larger roles to your portfolio’s return. Yes, as I write this, I know that I sound like a complete hypocrite. But hear me out!

So this is what my investment portfolio looks like:

TFSA – Stocks (CRS, SLF), ETFs (VTI, XSB)


Non-registered investment account – ETFs (XIC)

Can you spot the change? My goal is to align both my target allocation and to hold the investment in the most tax-efficient location. As a result, I have removed my XIC (Canadian equities) holding from my RRSP account and will add it to my non-registered account. I am waiting for XIC to drop a bit in price, as well as watching how the Canadian dollar is moving with the US dollar as all the money in my non-registered account is currently in US funds. My deadline is that I will purchase XIC before the ex-dividend date of its next payout (mid-March I think). We will see if I will get burned by this. Who knows, I might just go buy it after I finish this post. Anyways, when I sold my XIC holding in my RRSP, I immediately bought VEU as my international equities was lagging.

My target allocation is:

Canadian equities: 30%

US equities: 25%

International equities: 25%

Canadian bonds: 20%

My current allocation is:

Canadian equities: 21%

US equities: 25%

International equities: 23%

Canadian bonds: 18%

Cash: 13%

So even when I replaced XIC with VEU, my international equities is still lagging a bit. I’m still debating if 2% is enough to make another purchase though. I know I definitely need to boost my Canadian holdings. With the remaining cash (I made my 2012 TFSA contribution), I’m debating whether or not to add to my bond holding or maybe add a REIT ETF. My target for the REIT would be 5%, which will drop my target bond holding down to 15%. Or maybe add a real return bond component? Decisions, decisions.

What do you think? Should I add REITs to my portfolio and drop my bond allocation down to 15%? Or add in a real return bond component instead? What does your current portfolio look like?

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9 Comments (+add yours?)

  1. Liquid Independence
    Feb 16, 2012 @ 22:53:09

    Your target allocation looks pretty balanced miss V. I’m a little disappointed in the markets as well. US stocks are at a 9 month high and I really thought we would see a small correction by now. I have some money waiting to be deployed, but I don’t see any good opportunities currently. I prefer REITs rather than fixed income myself because I don’t have to deal with inflationary risk. But that’s just me personally.


    • Vicky Vo
      Feb 17, 2012 @ 02:37:38

      Do you think REITs are still good right now even though they’ve gone up quite a bit in the past few years?

      Been watching your swing trade.. living vicariously through you as I’m /trying/ to be disciplined. 🙂 Will be interesting!


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  3. Matt @ Dividend Monk
    Feb 19, 2012 @ 18:13:49

    Yup, I’m a bit frustrated at the rising market. There’s been upward movement in American equities since Nov 2011, which is not good for a net buyer of stock.

    I’ve been focusing on buying a few values here and there, and also selling some put options to get paid to wait for a lower cost basis before entering a position.


    • Vicky Vo
      Feb 20, 2012 @ 15:52:36

      I keep expecting it to drop a bit with the economic data and the global environment! It’s going to correct…. now, to figure out when. 🙂 Thanks for dropping by!


  4. Christine
    Feb 20, 2012 @ 02:55:31

    In a previous post you mentioned that certain investments would be better in RSPs (foreign holdings, I believe) and others in TFSAs… Could you explain more about that?

    I have recently pulled out everything from a financial advisor and thought maybe something like ETFs for RSPs since I have the minimum lump sum — and then TD e-series or other index funds for TFSAs so that I have more flexibility. But is this a good idea, or do I have it backwards, and what else am I missing?!

    Also, at the moment the funds are in a huge short-term GIC until I decide I understand what I am doing, and that the market isn’t right before an obvious crash. Did that before, twice. I realize there is no real way to know, but there are signs right now…


    • Vicky Vo
      Feb 20, 2012 @ 15:39:40

      Hi Christine,

      Based on the tax rules in Canada, certain types of investments are more advantageous in the different accounts available. I will post about this in greater detail this week!

      In regards to what to hold in each account, we can definitely chat more if you like. We can do it on my blog, or through my email if you want a bit more privacy. 🙂 It will depend on a couple factors; what your comfort level is with buying/selling stocks, how much you have ready to invest and what are your saving goals for the year, what your savings/investment habits are (monthly asp vs. annual contribution) and where your accounts are held (brokerage account vs. mutual fund account at bank). Fire me an email with your preference and let’s continue chatting!

      Thanks for dropping by; great to have you!


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